High-Profile Events, Higher Stakes: Insurance Considerations for Security Firms
Tory Brownyard, Brownyard Group, CALSAGA Associate Member
California is a well-known hub for some of the world’s largest, most star-studded events, from sporting events like the Federation Internationale de Football Association (FIFA) World Cup to award shows like The Oscars and countless celebrity gatherings. Such events are often highly publicized, attracting thousands of attendees and international interest, requiring specialized security to properly protect those involved.
While not California-based, Taylor Swift and Travis Kelce’s recent wedding at Madison Square Garden in New York stands out as a prime example of a high-exposure event. Attended by nearly 1,000 celebrities and topping the headlines of major news outlets, many listed this as the event of the year. Among the coverage of the event was mention of the level of security involved. Photos of the extensive security presence, including the New York City Police Department, circulated online, with security costs reportedly reaching $160,000.
While such prominent events can present new business opportunities for security firms, they come with increased risks that could outweigh the profitability of the work. Large-scale gatherings require significant security, introducing unique insurance exposures, including public safety concerns, vendor coordination and a higher potential for severe, costly claims. With such high stakes, security firm leaders must carefully evaluate the insurance risks involved and ensure they have adequate coverage before accepting a high-profile assignment.
Risk Exposures to Consider
High-profile security jobs come in a variety of forms, from celebrity events and entertainment gatherings to conferences and even legal proceedings, like the well-covered Luigi Mangione trial. One key factor that makes these jobs different from securing a commercial building or residential neighborhood is the number of people involved. High attendance rates naturally increase the likelihood of incidents, whether it’s a slip or fall, or a more complex issue such as a crowd surge or serious medical emergency. At the same time, mass gatherings are often considered attractive targets for malicious acts, like terrorism or other intentional violence. These factors place increased responsibility on security personnel to anticipate and mitigate evolving threats.
Additionally, the more high-profile an event, the more public the consequences of an incident will be. While a security issue at a shopping mall or corporate office may attract local attention, an incident at a nationally televised sporting event or celebrity gathering can become headline news within minutes. Such visibility can create reputational damage for the security firms involved, potentially impacting future business opportunities as a result.
High-profile claims also tend to involve greater legal scrutiny and higher settlement costs, making comprehensive risk management practices even more important. Complex contractual language involving liability and indemnification makes the stakes even higher. In the case of a claim, security firms may be questioned to ensure contractual obligations were met, proper safety measures were implemented, and industry standards were followed. Without a clear understanding of contract terms and their legal implications, firms may face unexpected responsibilities or financial exposure.
Security firms should also consider operational issues when planning for liability risks. Larger events require increased staffing and coordination, from event coordinators and venue managers to law enforcement agencies, emergency responders, production teams and numerous third-party vendors. The need for more staff and organization can create liability issues, and even small breakdowns in communication or unclear lines of responsibility can increase the potential for insurance claims.
Best Practices for Security Success
It is important for security firms to consider the risks related to any contract before accepting the work. While high-visibility assignments may present an exciting growth opportunity, the risks may be outside the scope of the firm’s risk appetite and insurance coverage. Before accepting the job, security firm owners and operators should consider carefully reviewing their insurance policies and potential work contracts. In particular, they should consider:
- Coverage Gaps: Not all insurance policies include coverage for special events. Some carriers specifically exclude security services conducted at large public gatherings unless coverage has been added or approved in advance. Before committing to event work, firms can speak with their agent or broker and thoroughly review their insurance policies for exclusions related to special events, crowd control or high-profile venues. Assuming policies include event work could result in denied claims and costly losses.
- Coverage Limits: Firms should also consider carefully reviewing their insurance coverage limits to ensure they are appropriate for the size and risk profile of the event. A policy that is sufficient for day-to-day commercial security operations may not provide adequate protection for an event involving tens of thousands of attendees or substantial property values. The security firms may also be contractually required to provide higher limits of liability.
- Contractual Liability: Contracts related to event work also require scrutiny to avoid risk exposure, especially when working with third parties. Event organizers and certain venues may require specific endorsements or indemnification agreements that transfer liability to the security firm should something happen. Security firm owners and operators should carefully review all contractual language to ensure clear responsibilities are defined and negotiate against accepting liability where possible in the case of a claim.
Security firm owners and operators who consult their insurance agent or broker before accepting a contract, for a high-profile event particularly if they are outside the scope of the firm’s usual operations, can save them from the potential of significant losses. An insurance agent who is well versed in the security space can identify potential coverage gaps, explain exclusions, recommend additional coverage and help determine if adjustments to the policy are warranted.
High-profile events are a mainstay for the Golden State. Understanding insurance coverage details and limits, as well as the risks ahead related to an assignment, before accepting complex or large-scale event assignments can help security firm owners confidently pursue new business while avoiding costly coverage surprises.
Tory Brownyard, CPCU, is president of Brownyard Group (tbrownyard@brownyard.com), a program administrator that has been a leader in meeting the insurance needs of the security industry for 75 years.